New Rental Housing: April’s Grove

Many islanders lack access to a year-round affordable rental home. To address this shortage of housing, OPAL has purchased nearly four acres on North Beach Road – across from Children’s House and north of the orchard – in order to build approximately 45 affordable rental townhomes, and now has 90% of the funding necessary to start construction.

Jim Nelson, the prior owner of the property, said “Betsy and I are happy that this property will be serving a community purpose. “There is a real need for more affordable rental housing on Orcas Island.” The Nelsons have retained ownership of the adjoining orchard, which will remain as open space. When developed, a stormwater drainage tank will be located under the orchard.

The Need

The 2015 Washington State Housing Needs Assessment reported that there are houses with affordable rents for only 15% of renters with extremely low-incomes or 26% of those with very low-incomes. Over half of San Juan County renters (54%) are unable to afford the fair market rent for a two-bedroom unit.

There’s a similar troubling trend in terms of homelessness in San Juan County. A San Juan County Housing Bank Commission Report in October 2015 pointed to a more than 100% increase in the un-sheltered homeless count between 2012 and 2015 from 32 to 74 individuals. Similarly, the homeless living with family and friends has increased from 27 to 60 in the same time period.

The Design Team

OPAL’s Board of Trustees and staff selected the team through competitive processes:

2017: Purchased the property, and San Juan County committed funding to the project, and supporters donated and pledged another $450,000.

2018: Federal and State funding awarded. Close the final funding gap and secure permits.

2019: Construction.

2020: Occupancy.

Photos courtesy Environmental Works.

Frequently Asked Questions

Why is there so much less rental housing now than in earlier years?

The market is changing. In the past, more cabins and houses were rented year-round. We believe that the proliferation of online rental accommodation companies, such as Airbnb and VRBO (vacation rental by owner) may be a factor. As one of the local young people searching for suitable housing said, “The days of the funky cabin in the woods are basically over.”

Who are the people who need rental housing?

Islanders who need affordable rentals are people who work – mostly in public service or the retail service trades. They live here now, but are constantly having to move because their rental is sold or turned into a transient rental. There has also been an increase in the population of people who are homeless. And adults with disabilities – who could live on their own with support services – need more options than are available on the island. Finally, larger employers, such as the School District and OPALCO, want reliable year-round rentals for new employees. Without access to housing, they are losing qualified prospective employees, who chose not to accept positions when offered.

How many people would be housed?

There will be 45 residences ranging in size from studios (384 s.f.) to 3 bedrooms (1,280 s.f.). We estimate that between 100 and 140 people will live in the new neighborhood.

Will this compete with other rental housing being developed by private developers?

The need for year-round rental housing is so deep that even OPAL’s efforts will not solve it. A number of other projects are in the planning stages for Eastsound. Some will be available for year-round rental and others will be for seasonal or transient accommodations. The houses created by OPAL will always be available for year-round tenancy and will always be affordable for people with low to moderate incomes.

How is this different from what private developers are doing?

The rents in OPAL’s development will be significantly lower than what is possible for private developers. Rents will range from $300 to $1400 and average about $600 per month. This is possible because the project will have a mortgage of only about $2 million, even though it will cost $12.6 million to build. A private developer does not have access to the grants and donations that help to reduce debt service and thereby keep rents affordable. Put another way, private developers can’t make a project like this “pencil out.’’

Where will the money come from?

The funding plan has four elements: (1) donations from islanders and other supporters, (2) a grant from the State Housing Trust Fund, (3) Low Income Housing Tax Credits from the Washington State Housing Finance Commission, and (4) a mortgage small enough to be repaid with rental income.

Why does it cost so much?

Construction on Orcas Island is more expensive than on the mainland, but even on the mainland, construction costs have risen dramatically in the past couple of years. Add to that the cost of complying with permitting regulations, and also the legal and transaction costs to abide by the requirements of grantors and the IRS standards for tax credit investors. Two other factors add cost: (1) OPAL strives to build homes/apartments that are healthy and durable, which means spending a bit more up-front (but saving money on maintenance later); and (2) The plans include a “commons building,” housing both the laundry and a gathering room where tenants may have larger gatherings or take classes.

The land has a beautiful stand of trees. Will you have to take all those trees down?

OPAL has hired Carson Sprenger, a certified arborist, to identify the large and beautiful trees that have the greatest likelihood of living at least another 50 years. The site plan has been designed to preserve these trees. We also plan to maintain a screening of trees along North Beach Road. That being said, there are still a significant number of trees that will need to come down to make room for buildings. We hope to make use of some of the wood harvested from the property to make benches, and possibly some elements on the buildings.

Were there other choices for land that didn’t involve taking down so many trees?

We looked at several other plots of land, but none met our needs. This location is ideal from a great many perspectives. It is close to all the island’s schools; it is walking distance to all Eastsound services so it works for seniors as well as for families with children; it is within the Eastsound “urban growth area,” which is designated for higher density.

Will the rentals be open to anyone who applies, or are there restrictions on who will be eligible to live there?

There will be income restrictions for 41 of the 45 residences. That is part of the bargain we make when using State and Federal funds. The income levels vary by household size. For the 41 residences that are restricted, the average annual income will be around $30,000 and it will range from a low for a single person of below $14,000 to a high for a family of 4 of about $56,000. Four of the residences will not be restricted by income, and are designed to serve the needs of newly hired employees for some of the island’s larger employers, such as the School District and OPALCO.